Malaysia’s Capital A has submitted plans for a corporate restructuring, which will involve the merger of its low-cost airline AirAsia with long-haul carrier AirAsia X.
The company will set up a new division, called AirAsia Aviation, which will be run by Bo Lingam, who is currently president, airlines and group CEO of AirAsia Aviation Group Limited.
Capital A will then also include two other portfolios: the digital businesses and the logistics plus aviation services. They will be managed by Captial A CEO Tony Fernandes, who stepped down as acting group CEO of AirAsia X earlier this month.
The group also wants to carry out a separate “spin-off listing” in the future for the aviation services businesses of Capital A.
The corporate restructuring is designed to help it exit its “PN17” status, given to it by Bursa Malaysia, Malaysia’s stock exchange, which classifies it as a financially-distressed firm.
“We were at the sharp end of Covid, as were many airlines around the world, but we are coming out of it stronger than before — our airlines and network are fast returning to pre-pandemic levels, and our digital businesses are performing better than many had expected,” Fernandes said in a statement.
“While our PN17 status remains an accounting issue and does not accurately reflect the business viability and prospects of Capital A, we have nevertheless worked very hard to develop a plan to address the PN17 status as a key part of our post-pandemic recovery journey.”
Capital A aims to submit its proposal to Bursa Malaysia for approval in February 2023.
Formerly known as AirAsia Group, Capital A has become an investment holding company with a portfolio of business that includes its airasia superapp, which saw monthly active users reach more than 10.6 million in the second quarter of this year. It also operates fintech firm BigPay.
AirAsia X recently resumed flights between Kuala Lumpur and Jeddah in Saudi Arabia.